When should a party state their case in ancillary relief?

In the absence of formal pleadings, when should a party in ancillary relief state their case and what penalties exist if the rules are breached? Alexander Chandler, of 1 Garden Court, summarises the position.

There are a number of reasons why an applicant for ancillary relief is not required to file particulars of claim. The first stage in any application is the computation of assets, which requires both parties to give full disclosure. Logically this stage precedes the second, how the assets should be fairly distributed (Charman v Charman (No 4)[2007] EWCA Civ 503). Until the assets are known, a party is not obliged to nail their colours to the mast.

Secondly, the court’s role in ancillary relief is different from civil litigation. The objective of a fair outcome gives an almost limitless discretion to the court and;

“…the judicial task is very different from the task of the judge in the civil justice system whose obligation is to make findings on all issues in dispute relevant to outcome. The quasi-inquisitorial role of the judge in ancillary relief litigation obliges him to investigate issues which he considers relevant to outcome even if not advanced by either party. Equally, he is not bound to adopt a conclusion upon which the parties have agreed.”

Per Thorpe LJ, Parra v Parra [2002] EWCA Civ 1886 at [22]

But, without the discipline of formal pleadings, when should a party in ancillary relief state their case, i.e. identify the main planks of their case, the authorities they rely upon and the orders they seek? What penalties exist where these rules are breached, for example where on the morning of a final hearing, a party produces a lengthy skeleton argument or changes tack and asserts for the first time that this is a ‘compensation’ case?

Pre-issueParagraph 3.4 of the Pre-Application Protocol1 encourages parties to ‘…clarify their claims and identify the issues between them as soon as possible… openness in all dealings is essential’. Paragraph 3.1 requires the parties to ‘…always bear in mind’ the overriding objective that cases are dealt with justly (cf. FPR 2.51D).

Prior to First AppointmentForm E allows a party to summarise their case on standard of living, contributions, conduct (paragraph 4); and gives the party the option (“…if you are able at this stage”) to set out the orders they seek (paragraph 5). However, save for straightforward cases, Form E does not sufficiently set out a party’s case and the court should be invited to direct the filing of narrative statements:

“It seems to me that in cases such as this, which are not simple or run of the mill, a Form E is not sufficient to give the court full information. Therefore, as a matter of course, parties should set out their case clearly in statements before the commencement of a trial.”

The parties are obliged to file a concise statement of issues 14 days before the first appointment (FPR 2.61B(7)). In some cases, this document will helpfully summarise the parties’ apparent cases (however widely drawn). In others, for example where disclosure is incomplete or there are serious concerns over non-disclosure, the temptation, particularly where disclosure is incomplete, is to produce a list along the lines of “1. Quantum of lump sum; 2. Quantum and term of periodical payments, 3. Pension sharing’ etc.

There is no obvious penalty where this rule (or any of the other Ancillary Relief Rules) are breached, beyond the ultimate sanction of costs. A party who intends to seek a costs order should ordinarily make this plain in open correspondence or in a skeleton argument2. The factors the court should take into account include the failure by a party to comply with the relevant rules and practice directions (FPR 2.71(5(a)). However, with the general rule that there will be no order as to costs, in all but exceptional cases, a costs order can be discounted as unlikely.

Intervener casesBy contrast, where a claim for ancillary relief leads to the intervention by a third party, it is good practice (although not a requirement of the FPR) for the applicant to file ‘points of claim’, the defendants to file a defence and the matter to be listed at a preliminary hearing (TL v ML[2005] EWHC 2860 (Fam) at [36]). In particular, it is desirable for an applicant to set out the legal basis of her claim against a third party at the outset:

‘…even in the Family Division, a spouse who seeks to extend her claim for ancillary relief to assets which appear to be in the hands of someone other than her husband must identify, and by reference to established principle, some proper basis for doing so. The court cannot grant relief merely because the husband’s arrangements appear to be artificial or even “dodgy”.’

“[the wife’s case] would have been more pitilessly exposed, and at a much earlier stage in the proceedings, had the presentation of her case been exposed to the intellectual discipline which is one of the advantages of any system of pleading. Moreover, if the wife had been required to plead her case everyone would have had a much clearer idea, and at a much earlier stage, as to exactly what she was or was not asserting and as to exactly what the husband and the interveners were or were not saying by way of defence.’ ,

FDRFPR 2.61E requires that all offers and proposals are filed with the court 7 days before the FDR. The obligation to file further documentation position statements in advance depends on whether the matter is listed at the High Court or is listed at the Principal Registry or county court and has a time estimate of over one hour.

a) High Court and FDRs listed at PRFD or county court for over one hourWhere the FDR is heard (a) at the High Court, (b) with a time estimate of over one hour at the Principal Registry or at county court level, the Court Bundles Directionapplies3, which requires preliminary documents (CBD para. 4.2) lodged by 11am the day before the FDR (CBD para. 6.4) which must include position statements by both parties and, where appropriate, skeleton arguments with copies of the authorities relied upon (CBD para. 4.2). The penalty of any breach of the Court Bundles Direction is set out at paragraph 12:

“Failure to comply with any part of this practice direction may result in the judge removing the case from the list or putting the case further back in the list and may also result in a ‘wasted costs’ order in accordance with CPR 48.7 or some other adverse costs order”

There is no guidance in the rules as to the format of a position statement, and or provision as to when it should be exchanged with the other side prior to submission within the preliminary documentation.

b) PRFD and County Courts if FDR listed for one hour or lessIn all other cases, i.e. in respect of most FDR’s which are listed for one hour outside the High Court, the Court Bundles Direction does not apply.

Accordingly, and regrettably, there is no rule setting out when position statements should be filed. Invariably, this will mean (unless the parties representatives have agreed privately to exchange their documents), that position statements are exchanged on the morning of the FDR. Although this may be acceptable in straightforward cases, it is not in complicated matters and where the other side acts in person.

Final hearingsPrior to the final hearing, the applicant is required to file and serve her open proposals ‘…not less than 14 days before’ the final hearing (FPR 2.69E(1)); the respondent ‘…not more than 7 days after service’ of the applicant’s open proposals (FPR 2.69E(1)). These documents must set out ‘…concise details, including the amounts involved, of the orders’ each side proposes.Provided the final hearing is listed with a time estimate of over one hour, the Court Bundles Direction applies to all final hearings at county court, PRFD and High Court level. As noted above, this requires the lodging of both parties’ position statements and skeleton arguments by 11am the day before the hearing. The potential remedy is being put further back in the court list (which invariably is a curse on both parties) or costs:

“Too often skeleton arguments and other preliminary documents (see para 4.2 of the Practice Direction) are handed in on the morning of the hearing – at 10 am, 10.15, or even later – and at a time when the judge is already sitting or is struggling to assimilate other documents which have also been handed in late… In the case of those who practise regularly in the family courts there is, and can be, absolutely no excuse for not being completely familiar with the Practice Direction and its contents and complying meticulously with its requirements”

There is no rule as to when skeleton arguments should be exchanged between the parties’ advisers prior to the filing of the preliminary documentation (11am on the eve of the hearing). By contrast, the Chancery Guide provides for exchange two clear days before the trial (Chancery Guide, para. 7.20).

ConclusionThe applicable Rules and practice directions encourage parties to identify the issues and clarify their cases at an early stage. However, in practice, there is often little effective remedy against a party who acts in breach. Putting the matter back in the list may be effective at FDR (although it penalises the innocent party as much as the party in breach) but is not generally helpful at final hearing, where delay will risk the matter going part-heard. Similarly, although the court has powers to punish breaches by way of costs order, in practice, this is reserved for exceptional cases.

The better course, it is suggested, is to take steps to insure against a party acting in breach by seeking specific directions, e.g. at the first appointment it may assist for the court to direct schedules of assets (FPR 2.61(b)), further statements of issues (FPR 2.61D(2)) and position statements should be filed by 11am on the day before the FDR (in cases to which the Court Bundles Direction does not apply). Similarly, after an unsuccessful FDR, it may be worth seeking specific directions as to when position statements and skeleton arguments are exchanged, in advance of the Court Bundles Direction deadline.